BEIJING (Pakistan Point News / Sputnik - 14th August, 2020) The Hong Kong economy can contract by 6-8 percent in 2020 over uncertainty caused by the coronavirus pandemic and related lockdown measures, as well as external shocks, the special administrative region's government said in a downgraded GDP outlook on Friday.
In late April, the authorities projected that the growth would total between -4 percent and -7 percent.
"Hong Kong's short-term economic outlook is still highly uncertain. Considering the actual outturn in the first half of the year, and the difficult and uncertain economic environment in the second half, but also the cushioning effects of the Government's massive relief measures, the real GDP growth forecast for 2020 as a whole is revised downwards to -6% to -8% in the current round of review," the press release said.
If the coronavirus pandemic is contained in a short time and "further sharp deterioration in the external environment" is averted, the economic performance for 2020 "can hopefully fall within the upper half of the range forecast," the government noted.
In 2019, Hong Kong's economy fell by 1.2 percent for the first time in 10 years, on the heels of protests in the autonomous region and the US-China trade war.
Meanwhile, according to the government, the special administrative region's GDP has significantly dropped over the second quarter of 2020 due to challenges posed by the coronavirus pandemic.
"The Hong Kong economy remained very weak in the second quarter of 2020, as the COVID-19 pandemic continued to deal heavy blows to global and local economic activities. Real GDP fell notably by 9.0% year-on-year in the second quarter, following the record decline of 9.1% in the preceding quarter," the press release said.
At the same time, there were signs of the economic stabilization in the latter half of the quarter, as the region's GDP fell by 0.1 percent compared to the previous quarter after having plunged by a record 5.5% in the preceding quarter.
"Total exports of goods saw a visibly narrower year-on-year decline of 2.4% in real terms in the second quarter despite the global recession, mainly reflecting the swift resumption of production and other economic activities in the Mainland. Exports of services plunged further by a record 46.1% year-on-year in real terms, as inbound tourism was frozen by widespread travel restrictions, and as cross-boundary transport and commercial services plummeted," the government added.
The press release added that domestic demand also took a big hit over the threat of COVID-19 and social distancing requirements. In particular, private consumption expenditure saw the steepest ever year-on-year decline of 14.2 percent in the second quarter, while overall investment expenditure continued to fall by 21.4 percent in the second quarter compared to the same period of 2019 amid negative business environment and subdued private construction activity.
